Large tonnage gold deposit in Chile outlined by Cominco’s 1989

Completion of drilling at the Lobo project in Chile has outlined a deposit of 80 million tons grading 0.045 oz. of gold per ton, Vancouver-based Cominco Resources International (TSE) reports. The 1989 drill program at 50% owned Lobo outlined the 80- million-ton reserve figure. (A cutoff grade of 0.015 oz. of gold per ton was used.) More than half of the gold at Lobo occurs in a higher- grade portion of the deposit.

Mining, metallurgical and prefeasibility studies are under way. The company is evaluating the potential to develop an operation combining heap leaching of low- grade oxide ore with milling and agitation-leaching of higher-grade ore.

Construction of the mine facilities at the 75% owned Marte gold project in Chile was completed in the third quarter of 1989, with startup and running-in of the operation commencing in the fourth quarter.

At the end of the fourth quarter, 370,000 tons of ore had been crushed, agglomerated and placed on the leach pads and the first dore bars had been poured.

Current projections indicate the planned production rate of 9,000 tons per day should be constantly achieved by the end of the first quarter. The potential to increase daily throughput is under review.

At the 42.5% owned Quebrada Blanca copper project, a definitive agreement was concluded in November regarding development and prefeasibility studies have commenced. Preparations for metallurgical tests at the Quebrada Blanca site were started in December.

The on-site tests are designed to assess the leaching characteristics of the enriched copper ore under local conditions. Metallurgical test work and feasibility studies will continue through 1990.

The smelter produced 530,000 lb. of nickel in ferronickel during the fourth quarter. One of the four ore melting furnaces was shut down in late November due to a transformer failure. Repairs to the transformer should be completed late in the first quarter.

A stockpile of intermediate product has been accumulated during the startup period and will be processed by a new plant at the smelter complex which started production in February. During the first quarter of 1990, operating costs and plant capacity are expected to be confirmed as the smelting operation begins to achieve full output.

A feasibility study is under way to examine the potential for importing the processing high-grade lateritic ore. This alternative should increase annual nickel output from 13 million lb. to about 40 million lb. Because of the recent sharp drop in nickel prices, the operation is being thoroughly reviewed, including short-term unit-cost improvements and contingency planning for a possible temporary shutdown.

The company’s share of gold production at the 76.4% owned Buckhorn mine in Nevada in the fourth quarter was 4,773 oz. A total of 225,008 tons grading 0.047 oz. of gold per ton was crushed and placed on the leach pads in the fourth quarter.

Reserves at the end of the year were 791,000 tons grading 0.054 oz. gold per ton. Exploration drilling completed in the second half of 1989 defined an additional 95,000 tons of oxide ore grading 0.089 oz., which is included in the year-end reserves. The 1990 exploration program will get under way shortly.

Advance of the decline at the 49% owned Marie copper project in Mexico continued in competent rock. By the end of January, the decline had progressed about 290 metres of the targeted completion length of 560 metres. Several ore processing options are being studied in anticipation of commercial production in the second half of 1990.

Drilling completed in 1989 at the wholly owned Mariquita copper project in Mexico and preliminary pit planning have established minable reserves of 22 million tons grading 0.52% copper. Preliminary metallurgical results have been encouraging and prefeasibility studies are under way.

The Mariquita project has the potential to become a low-cost copper producer utilizing the heap leaching, solvent extraction/ electrowinning process, the company says. The Mexican government’s efforts to improve the investment climate for foreigners have the potential to improve the project economics significantly. Metallurgical testing and project feasibility work is in progress.

In the fourth quarter, work focused on preliminary economic studies of the 50% owned Sheep Creek copper project in Montana. Results indicate additional reserves are required in the Upper and Lower zones to justify a mining operation.

Drilling resumed in January with the goals of extending the Upper and Lower zones and testing a number of outlying targets. Exploration expenditures totalling $1.4 million are planned for this year.

Meanwhile, in Turkey, encouraging results were received from a number of gold properties drilled in late 1989. Further drilling of these targets is planned. Exploration licences granted to Cominco Resources cover more than 11,000 sq. km in the Pontide Mountains of northeastern Turkey. High-grade gold-zinc-copper mineralization occurs on 10 prospects, which will be drill tested this year.

Exploration for zinc-lead deposits in the Irish Midlands continued on the company’s 700 sq. km of mineral licences. These properties are held under several joint venture agreements and will be aggressively explored this year.

In Chile, several copper and gold properties were in the early stages of exploration. Drilling and marketing studies continued on the San Martin wollastonite project in Mexico.